A statement from the General Administration of Quality Supervision, Inspection, and Quarantine (AQSIQ) issued late on Saturday said the toy maker had used the toxic chemical 1,4-Butylene glycol as a softener in the production process and that the end products contained 14.5 percent of the toxic substance.

The chemical can simulate the drug gamma hydroxyl butyrate, also known as GHB, if swallowed, which can lead to breathing problems, loss of consciousness, seizures, drowsiness, coma or death, the AQSIQ said.

According to a China Daily report, at least five children in America and Australia were reported to have fallen sick after swallowing the beads.

These incidents triggered the recall of millions of units of the popular craft toys in the two countries last week.

The toys, products of Australia-based Moose Enterprises, were sold as Aqua Dots in the US and Bindeez in Australia.

Moose’s agent, Hong Kong-based Duo Yuan Plastic Production Co, outsourced the manufacturing of the toys to the Wangqi Product Factory in Shenzhen.

Exports of the bead toys have been suspended, as too the toy maker’s export license, the AQSIQ said.

The statement said the AQSIQ had also asked the US side for help in detecting, analysing and evaluating the harm the chemical can cause.

However, it said Wangqi had submitted the production formulas and samples to the distributor Duo Yuan before mass production and received no objection. Moose Enterprises provided the bead samples.

The investigations also showed the packaging of the toys carried warnings including “swallowing can cause danger” and “no suitable for children under 3″.

The Australian-designed Bindeez beads were named 2007 Toy of the Year at the Melbourne toy and hobby fair.

The toys are supposed to be made with the non-toxic 1,5-pentanediol, a chemical commonly used in computer printer ink. However, this costs three or four times as much as the toxic alternative found in the recalled toys. (ANI)